Buenos Aires Province has imposed a sanction of 194 million pesos on the Worldcoin Foundation for the irregular handling of biometric data obtained by iris scanning across the region. The decision was made through the Ministry of Production, Science and Technological Innovation, from where they also ordered the elimination of predatory clauses from the company’s contracts and the protection of consumer rights.
The investigation started earlier this year, when they discovered significant irregularities in the operations of Worldcoin, a company founded in 2019 by Sam Altman, co-creator of ChatGPT. This company became widely renowned for checking identity via iris scanning, in exchange for a sum of cryptocurrency, currently valued a US$80.
The programme does not establish a clear age limit to participate and only requires the acceptance of some terms, including the impossibility of suing Worldcoin. This clause alerted the Buenos Aires Province government, who focused on the administration and unsafety in terms of sensitive biometric data collected by the company by the “Orb” device.
Provincial authorities have discovered that the contracts contained clauses which violated local regulations and that the biometric data were not handled as promised. Among the most worrying finds were the lack of credentials of identity and the lack of information on the minimum age needed to use the service.
“The lack of these requirements could expose minors to the collection of sensitive data, which underlines the urgent need for stricter regulation in a context of growing vulnerability among teenagers”, said Ariel Aguilar, Commercial Developmen and Investment Promotion Undersecretary of Buenos Aires Province.
In relation with predatory clauses in Worldcoin’s contracts, it was revealed that these documents contained provisions that allowed for the suspension of the service without reimbursements, waiving class action lawsuits and the application of foreign laws. These conditions violate the Civil and Commercial Code, infringing on fundamental rights and posing a significant challenge against the local regulation.
“Contradictions in the contract and the lack of clarity on storage of biometric data generate serious doubts. The complexity and novelty of this technology require rigorous supervision to protect consumers”, added Aguilar.
The Worldcoin Foundation talked to PERFIL and stated it was “surprised over the recent fine imposed over the Provincial Consumer Protection Office", clarifying that it “rejects” it.
"The Worldcoin Foundation believes there is a fundamental misunderstanding about the facts and legal framework and will appeal this decision, trusting its position the precedents set by competent courts", they argued.
They concluded: “The Worldcoin Foundation maintains its commitment to maintain transparent and fair practices, and will continue to uphold the highest standards of data privacy proection in full compiiance with applicable laws and regulations in the markets where Worldcoin operates”.
During the first months of 2024, Worldcoin’s call was massive online due to the economic crisis, inflation and the adjustment of middle and lower sectors, to such an extent that ever since there have been over 500,000 Argentine members who had their irises scanned in exchange for cryptocurrency bonds. This setting gained notoriety after there were huge queues at several stalls the company had set up around the Buenos Aires Metropolitan Area.
Given the lack of specific local legislation to regulate this kind of activity and after reviewing international regulations, Buenos Aires Province is developing a data protection law that sseks to safeguard the rights of citizens in the face of new technologies.
--TIMES/PERFIL
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